Canada’s financial sector needs strong regulations to incentivize it to act on climate change, because voluntary action is not happening fast enough to meet the country’s obligations.
That’s the conclusion of groups like Environmental Defence, Ecojustice and Shift: Action, which released a report on Wednesday urging the federal government to demand that companies in the sector have “credible” climate plans — aimed at limiting the warming to 1.5°C — and to submit these to the assessment of regulators.
Banks and other financial players have already pledged to achieve net-zero emissions by 2050. They have this year set shorter-term funded emission reduction targets for high-emitting sectors by 2030, such as the demands their membership of the Glasgow Financial Alliance for Net Zero (GFANZ), led by Mark Carney.
Environmentalists, however, point to the alliance’s decision last week to quietly distance itself from another climate club, the UN-backed Getting to Zero campaign, as evidence that voluntary pledges aren’t strong enough. The split came after the latter introduced tougher criteria around emissions reductions and fossil fuel funding in June, which led to pushback from many players and ultimately led to GFANZ no longer demanding that its members are also part of Objective Zero.
“A fundamental gap”
Julie Segal, senior climate finance program manager at Environmental Defence, says any credible climate plan has emissions peaking by 2025, when the financial sector is still spending too much money on expanding climate production. fossil fuels.
“We need the financial sector to align with Canada’s current legal climate commitment to keep warming below 1.5 degrees. And it has to happen now,” she said.
She adds that the proposed regulations and oversight could be implemented within existing agencies and powers, while leaving each institution free to decide its own path, but current federal climate plans do not focus enough on the financial sector. “The financial sector is a key missing piece,” says Ms.me Segal. This is a fundamental gap in Canadian climate policy and a really central point. »